Rules of the Road: by Capt. Jake Desvergers
During March, the French government enacted a new decree affecting all foreign seafarers based in France. Referencing the guidance provided in the Maritime Labour Convention (MLC), the French have taken an international requirement and implemented it into national law.
This new law is a potentially significant directive that will affect all yacht owners and their crew working in France. In short, the new labor law requires social security payments for all non-French crew.
This new regulation will come into force on July 1. From this date, all seafarers who are resident or otherwise domiciled in France, irrespective of nationality, will be required to make social security contributions to ENIM, the national mariners’ social security agency in France.
If a seafarer makes social security contributions to an official agency of another country, he or she will not be asked to make contributions to ENIM. However, that agency must be within another EU member state or a country that has a bilateral social security convention with France. Some of those countries include the United States, Canada, India and Uruguay. In all cases, captains and crew should expect to provide evidence that contributions are being made. This can be made through a cancelled check or account statement.
For those affected employers of seafarers who are not resident in France, a “bond of guarantee” from a French bank will be required. Absent an ability to obtain such a bond, the employer must provide a security deposit to ENIM. The deposit to be made will be determined in accordance with the contribution rate published by the agency. It is a percentage of the total monthly and/or quarterly payroll. To facilitate this process, non-resident employers may appoint an agent physically located in France. The agency will act on behalf of the employer to make the contributions to ENIM.
Seafarer payments must be deposited according to a strict schedule of dates. Failure to make these required deposits may result in severe consequences. The current monetary penalty for a late payment of contributions is 0.5 percent for each day of delay. Additional failures to pay the contributions may be considered a violation of French law and constitute both civil and criminal offenses. This type of action exposes the yacht to unnecessary liability. Continued noncompliance could ultimately lead to arrest of the yacht.
So, for these new social security contributions, what does the participating seafarer receive in return? ENIM will provide the seafarer with health care, medical treatment and retirement benefits. Additionally, a full retirement pension will be made available when the seafarer has completed 25 years of service and reached a minimum age of 50. For those starting the contributions at a later stage in life, the pensionable age shall be available at 55 years of age. For those seafarers completing at least 15 years of contributed service, they will qualify for a prorated retirement pension. In the event of a seafarer’s death, there are options to pay retirement benefits to certain family members.
With any new law, there are several areas that remain undefined. A major component is that of proving if a seafarer is a “resident” in France. This can range from professional affiliations and family to vehicles and property. A clear indication of residency will be the declared place of repatriation in a Seafarer Employment Agreement (SEA). If France is listed, one may be considered a resident of France.
While recent changes in French law have been directly predominantly toward commercial yachts and the collection of tax revenue, this new decree affects crew on all yachts, both private and charter. Advice from local experts should be sought to ensure compliance by the July deadline.
Capt. Jake DesVergers is chief surveyor for International Yacht Bureau (www.yachtbureau.org). Comments are welcome below.